In recent years the world has seen a growing awareness of health and environmental issues, and sustainability has become the keyword whenever discussing economic development, particularly in relation to developing countries. It is a constantly growing number of concerned consumers, mainly in the industrialized countries of Western Europe, North America, Japan and Australia, that is the cause of this development. The international community is becoming more and more conscious of these issues, and government policies in industrialized as well as developing countries are increasingly formulated to encourage organic and other forms of sustainable agriculture.

Organic food is produced by farmers who emphasize the use of renewable resources and the conservation of soil and water to enhance environmental quality for future generations. Organic meat, poultry, eggs, and dairy products come from animals that are given no antibiotics or growth hormones. Organic food is produced without using most conventional pesticides; fertilizers made with synthetic ingredients or sewage sludge; bioengineering; or ionizing radiation. Before a product can be labeled 'organic,' a government-approved certifier inspects the farm where the food is grown to make sure the farmer is following all the rules necessary to meet United States Department of Agriculture (USDA) organic standards. Companies that handle or process organic food before it gets to your local supermarket or restaurant must be certified, too.

When babies begin to eat food (a messy business), they need a good source of nutrients to help them build a healthy body. Newborn babies live on milk (either breast milk or formula feed) and the stored nutrients that they take from their mothers during pregnancy. However, by the time they reach six months, these stores have run down, and it is important that they move on to a more -varied diet - particularly fruit and vegetables.

"Organic" refers not only to the food itself, but also to how it was produced. Traditional farming methods mean that traces of pesticides (used to kill insects that harm plants) are often left on much of the food we eat. Of great concern for parents, research has shown that children are especially vulnerable to these toxins, as their blood, kidneys and liver are not developed enough to excrete them. Even small amounts of pesticides can damage a child's long-term health. As a result, more and more people are now choosing to buy organic baby food.

Foods labeled organic must meet or exceed the regulations of the National Organic Program (NOP), which took effect October 21, 2002. They must be grown and processed using organic farming methods that recycle resources and promote biodiversity. Crops must be grown without using synthetic pesticides, bioengineered genes, petroleum-based fertilizers, or sewage sludge-based fertilizers. Organic livestock must have access to the outdoors and be given no antibiotics or growth hormones. Because organic production methods emphasize the use of renewable resources and the conservation of soil and water, organic foods also appeal to environmental concerns.

A pure organic diet can be more beneficial during the first few months of life than at any other time. Babies have immature systems and need the very purest and safest foods. Babies eat more food per kilogram of body weight than adults. Hence they are at a greater risk of accumulating chemical residues from ordinary foods than adults. A baby's organism is very fragile and sensitive to pollutants. His/her body is not sufficiently developed to filter them away. To protect babies, the baby food regulations set very strict standards for the nutritional composition of the different types of food. Thus, organic infant products have to comply with tough laws.

One of the single most important parental responsibilities is to ensure organic food plays a major part in the baby's diet during the early stages of life. During this critical stage of development, cells are multiplying quickly, but the body has a limited diet to draw upon. Immature organs and bodily systems respond differently to food - a small child's digestive system is more efficient than that of an adult at absorbing foods, enabling nutrients to be used more quickly but making children more vulnerable to toxins. It is for this reason that baby food is covered by special legislation. Preservatives, colorings and added salt are forbidden because babies cannot process them with their under-developed digestive systems.

STUDY GOAL AND OBJECTIVES

The markets for organic baby foods are strongly driven by environmental sustainability and environmental friendliness, concerns about long-term health benefits, and food safety. A preliminary research and literature search confirm that there is a large amount of latent unsatisfied demand for organic foods. The key constraining factors to industry growth are a lack of availability of suitable quality food on a year-round basis, the lack of critical mass to develop strong organic supply chains, and the premium prices being commanded. As availability improves and organics become more affordable, the supply chains will improve, and the market will grow exponentially.

Most large supermarkets in developed countries now stock at least a minimum organic range. This usually includes leafy vegetables and some organic processed foods and dairy products. In some cases, in the more developed countries, organics is now becoming established as a mainstream category in its own right. The organic range is expanding dramatically, driven by manifest consumer demand. Typically, supermarkets devote a whole area to the shelf-stable organics as well as a section within the fresh food areas for organic fruit and vegetables and other perishables. The demand for organics started with vegetables and fruits, but in recent times has expanded into meat, dairy products, processed foods, wine, cereals, etc. Another indicator of the consumer demand for organics is the dedicated organic stores or boutique supermarkets emerging with an extended organic range.

As societies become more affluent and their discretionary income increases, they tend to buy higher quality and differentiated food products. This increased affluence is a strong driver of demand in the UK, the US and Europe.

REASONS FOR DOING THE STUDY

The environment has become a very hot topic these days, especially among parents who want to protect their children's health and the world they will be inheriting. Organic food still accounts for a tiny portion of the overall baby food market, but it is growing at a very fast pace and is slated to become the food of choice for tomorrow's babies.

Organically produced foods are not treated with pesticides and other chemicals used in conventional farming which leave high residues in non-organic food. The pesticides used on conventional farms are designed to kill living -organisms - they are not only poisonous to the pests, but are also poisonous to us. One study into non-organic food has found that 23 of the 28 most commonly used pesticides are carcinogenic. Another study found 20 to 30 chemicals on the skin of the average conventionally grown -apple - even after the apple has been rinsed! Animals reared on conventional farms are often fed many chemicals on a daily basis, and these chemicals are passed on to us, as consumers of milk or meat.

Children are particularly vulnerable to the chemical residues found in food produced by conventional farming, as it is much more difficult for them to process, and exposure to these chemicals can significantly impair a child's immune system. Research has shown that some children are even born with a deposit of pesticides and other chemical residues in their bodies, and apart from the obvious physical dangers this poses, these children are also at serious risk from mental and emotional development difficulties. Also, research has shown that over a period of 15 years, organic farms use 50% less energy than conventional farms.

Therefore, iRAP felt a need to do a detailed market update and industry analysis for this industry.

SCOPE AND FORMAT

The market data contained in this report quantifies opportunities for organic baby food products. In addition to product types, it also covers the many issues concerning the merits and future prospects of the organic baby food products business. It also covers in detail the economic and regulatory issues regarded by many as critical to the industry's current state of change. The report provides a review of the organic baby food products industry and its structure, and the companies involved in providing these products. The competitive position of the main players in the organic baby foods market and the strategic options they face are also discussed, as well as such competitive factors as marketing, distribution and operations.

CONTRIBUTIONS OF THE STUDY

The study is intended to benefit the existing manufacturers of organic baby food products like organic milk, organic fruits and vegetables, organic cereals, etc. who seek to expand revenues and market opportunities. It also can serve as a reference for small food industry players who would like to expand to organic baby food products

This study also provides the most complete accounting of organic baby food products in North America, Europe, Japan, Australia, Argentina and the rest of the world currently available. The markets have also been estimated according to the type of organic baby food products.

The report provides the most thorough and up-to-date assessment that can be found anywhere on the subject. The study also provides extensive quantification of the many important facets of market developments in the emerging markets for organic baby food products, such as China. This, in turn, contributes to the determination of what kind of strategic response suppliers may adopt in order to compete in this dynamic market.

TO WHOM THE STUDY CATERS

The study would benefit the manufacturers and consumers of branded organic baby food products like infant formula, organic milk, organic cereals, organic fruits and vegetables etc. Since, there is a growing trend in the use of organic baby food products, this report can serve as a guide for both small start-up companies in this area and for future players.

This study provides a technical overview of branded organic baby food products, especially recent technology developments and existing barriers. Therefore, audiences for this study include marketing executives, business managers and other decision-makers in baby food products.